Gerdau unlikely to sustain price hikes in Brazilian long steel products

Tuesday, 22 September 2015 01:06:06 (GMT+3)   |   Sao Paulo
       

Sources told SteelOrbis that Brazil steelmaker Gerdau is “unlikely” to sustain the price hikes it has recently announced for all its long steel products, as reported by SteelOrbis.

Sources told SteelOrbis that Gerdau has increased all its long products by 17 percent.
SteelOrbis assessed WFB prices from Gerdau at the BRL 2,900-3,080/mt range ($751.88-$798.54), all ex-works, no taxes included.

A Sao Paulo-based distributor said it found no way to fight the price increase, despite the current low sales volumes.

Despite several sources saying they’re already passing the new prices for their WFB clients, a mill source said there’s no room for Gerdau to pass the same increase to rebar.

“Nobody is going to pass Gerdau’s price hikes,” a mill source said, adding the distribution market still has high inventories.

“The distribution network has inventories for about four months. There’s no risk of lack of supply at this moment. We have a lot of supply, but a very weak demand,” a Sao Paulo-based source said.

Gerdau can say it will increase long steel prices, but there’s no room for a hike like this. If inventories were low, then we could have an indicative for a price increase for long steel and especially for rebar,” the mill source added.

A source from Sinobras told SteelOrbis it is currently selling its CA-50, 10mm thickness rebar for BRL 2,460/mt, ex-works, no taxes included, down from BRL 2,800/mt (same conditions) in July, reflecting the competition from the main mills to keep inventories low and stimulate sales.

1 US$ = BRL 3.99 (September 21) 


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